I wrote the Inside Wall Street column at Business Week Magazine for 28 years, through December 30, 2009. It was one of the most influential market columns as it moved stocks that I highlighted each week. BW had a yearly ScoreCard Report that tracked the performance of the stocks I mentioned, and the results confirmed their positive impact..I also wrote two books: “<a href="http://www.amazon.com/Secrets-Street-Dark-Making-Money/dp/0070402566"Secrets of the Street, the Dark Side of Making Money,” published by McGraw-Hill in 1995, and “Gene Marcial’s Seven Commandments of Stock Investing,” published by FT Press in 2008. I resumed writing the “Inside Wall Street” column for AOL DailyFinance after Bloomberg acquired BW in December 2009. Subsequently, I moved the column to MSN.com after AOL merged with the Huffington Post. I then started writing for Forbes.com with a new column, “Street Beat,” in mid-April 2011, where I expect my readers will follow me.

With Spin-Off, McGraw-Hill Looms As The Next Attractive Stock Among Growth-Value Stock Plays

It’s time for investors to eyeball McGraw-Hill (MHP) as the new and potentially robust growth- and-value stock play, as it gets closer to splitting up into two companies. By Year-end, it will spin off to shareholders its education unit.

Already the stock is reflecting an upward spin, climbing to $49 a share from $42 over a month ago–and way up from a 52-week low of $34 in August last year. It closed on Aug. 7, 2012, at $49.41, up nearly 2%.

Some bulls predict the stock will continue to leap to much higher ground–to the high $50s or more in six to 12 months–as investors see more traction in the stock from the impending spin-off.

In spite of its seemingly unwieldy structure as a conglomerate, McGraw-Hill Cos has been one of corporate America’s steadfast stalwarts, providing global information services to such diverse businesses as financial service, commodities, and education, through various subsidiaries, including Standard & Poor’s, McGraw-Hill Education, S&P Capital IQ, and J.D. Power & Associates.

By year end, however, McGraw-Hill will become a more focused and reinvigorated company: It will split into two independent companies–McGraw-Hill Financial and McGraw-Hill Education–through a tax-free spin-off of the education business.

The split will “result in the creation of a pure-play financial-services-and-analytics-business behemoth in the form of McGraw-Hill Financial, with synergies flowing among its business units,” says Joseph Cornell, president of Spin-Off Research, in Chicago. The separation will undoubtedly improve strategic focus on each separate company, he adds.

“With the absence of common customers among the education and financial services businesses and significantly different risk-reward opportunities, we believe the separation will enhance shareholders’ value,” says Cornell.

Wall Street has always adopted a ho-hum attitude towards most conglomerates, so by letting go of its education operations and stand as an independent company, investors can focus on McGraw-Hill Financial as an opportunity to buy into a fresh and reinvigorated growth-and-value play.

The split-up was triggered by demands from activist investors, notes Cornell, who felt the declining education business has been a drag, negatively affecting the price performance of McGraw-Hill’s stock.

Harold W. McGraw III, McGraw-Hill’s chairman, president and CEO, says the separation is part of McGraw-Hill’s “growth and value plan,” and believes the two companies would improve growth prospects and at the same time deliver superior shareholder value. The plan calls not only for cost reductions and separation of the two units, he says, but involves getting into more “strategic investments.”

An example he cites is the launching of the S&P/Dow Jones Indices, which combine two iconic brands that should continue delivering index-based solutions for global investors. Although the joint venture is still unheralded, there are now $1.5 trillion directly linked to the indices, with more than 400 financial institutions using them to build or price funds, swaps, notes, options, forwards, futures and stocks. These institutional investors consider S&P/Dow Jones as the “most trusted indices in the world,” notes McGraw.

McGraw-Hill Financial, he says, will continue to “deliver solid top and bottom line growth and build new capabilities to “provide organic growth while pursuing bolt-on acquisitions.” And McGraw-Hill Education, he says, will focus on building “a unique set of digital products for longer-term growth as the market recovers and the digital shift accelerates.”

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